Stock futures slump as S&P 500 breaks key support level

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The stock market looks set for a lower open Monday with investors already looking forward to the Fed decision.

Nasdaq 100 futures (NDX:IND) -1.1%, S&P futures (SPX) -1% and Dow futures (INDU) -0.9% are all lower.

The S&P broke below the 3,900 support level on Friday.

“Over the last three years, the level on the SPX with the most amount of volume traded has been 3,900,” BTIG’s Jonathan Krinsky wrote. “It closed below that on Friday for the first time since July 18th which, in our view, opens the door down to the June lows (3,640).”

“While it likely won’t be a straight line, we have still yet to see any panic in the VIX (VIX) curve and monthly RSI has yet to get below 46 in this cycle,” he said. “1987 is the only ‘bear market’ in the last 90 years that didn’t hit sub 42 Monthly RSI. There are areas working, but they are mainly in the defensive low-vol arena. These areas typically outperform until the bear market hits its final low.”

There are no economic indicators on the calendar this morning.

The 10-year Treasury yield (US10Y) is flat at 3.45% and the 2-year yield (US2Y) is little changed at 3.86%.

All S&P sectors are lower premarket, with Energy down the most as crude slumps below $84 per barrel.